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Guild Mortgage Co. v. Welberg

United States District Court, D. Oregon

April 14, 2017

GUILD MORTGAGE COMPANY, a California corporation, Plaintiff,
PATRICK WELBERG, an individual; SCOTT STARR, an individual; and ACADEMY MORTGAGE CORPORATION, a Utah corporation, Defendants.

          PAUL C. BERG DANIEL C. PETERSON Attorneys for Plaintiff

          AMY JOSEPH PEDERSEN, LAURA E. ROSENBAUM, JOSEPH A. KROEGER Snell & Willmer LLP Attorneys for Defendants.



         This matter comes before the Court on the Motion (#15) to Compel Arbitration and, in the Alternative, Transfer Venue filed by Defendants Patrick Welberg, Scott Starr, and Academy Mortgage Corporation and Plaintiff Guild Mortgage Company's Motion (#30) for Preliminary Injunction. The Court is satisfied the record is sufficiently developed such that oral argument would not be helpful.

         For the reasons that follow, the Court construes that part of Defendants' Motion (#15) titled Alternative Motion to Transfer Venue as a Motion to Dismiss without prejudice, GRANTS that Motion, and DENIES as moot that part of Defendants' Motion (#15) titled Motion to Compel Arbitration. The Court also DENIES as moot Plaintiff's Motion (#30) for Preliminary Injunction.


         The following facts are taken from Plaintiff's Complaint and the parties' materials filed in connection with the Motions and are undisputed unless otherwise indicated.

         Plaintiff is a mortgage-banking company with its principal place of business in San Diego, California, and with branches located in Oregon and other states.

         Defendants Welberg and Starr are former employees of Plaintiff. Welberg began working for Plaintiff in approximately April 2011 and eventually worked as a branch manager in Plaintiff's Lake Oswego, Oregon, office. On June 6, 2012, Welberg signed a Non-Producing Branch Manager Employment Agreement with Plaintiff. On October 30, 2014, Welberg signed an Employee Confidentiality and Non-Disclosure Agreement with Plaintiff.

         Starr began working for Plaintiff on approximately June 23, 2011, and worked as a branch manager in Plaintiff's Wilsonville, Oregon, office. On June 23, 2011, Starr signed a Producing Branch Manager Employment Agreement[1] with Plaintiff. On July 15, 2015, Starr signed an Employee Confidentiality and Non-Disclosure Agreement[2] with Plaintiff.

         On October 17, 2016, Plaintiff terminated Welberg's employment for performance reasons. Welberg immediately went to work for Academy. Academy is also a mortgage-banking company with its principal place of business in Utah and branches located in Oregon. On November 7, 2016, Starr resigned from employment with Plaintiff and also went to work for Academy.

         On November 15, 2016, Plaintiff filed its Complaint in this Court. Plaintiff alleges Defendants Welberg and Starr violated the terms of their Employment and Non-Disclosure Agreements by using Plaintiff's confidential information to solicit Plaintiff's employees to work for Academy. Plaintiff asserts claims against Defendants for injunctive relief, breach of contract, intentional interference with business relations, and misappropriation of trade secrets.

         On November 23, 2016, Defendants filed a Motion to Compel Arbitration as to all of Plaintiff's claims. In the alternative, Defendants seek to transfer venue of this case to the United States District Court for the Southern District of California. On February 2, 2017, Plaintiff filed a Motion for Preliminary Injunction.

         On March 30, 2017, in the course of its consideration of the pending Motions, the Court requested the parties to file a joint supplemental memorandum that clarified their positions as to the meaning of the forum-selection language in the Employment Agreements. On April 7, 2017, the parties filed a Joint Supplemental Statement (#125) providing their positions.

         Because of the explicit forum-selection provisions in the Employment Agreements that may govern the determination as to which court should resolve Defendants' Motion to Compel Arbitration and Plaintiff's Motion for Preliminary Injunction, the Court will first address Defendants' alternative Motion to Transfer Venue.


         A motion to transfer venue is governed by 28 U.S.C. § 1404(a), which directs the Court to “weigh the relevant factors and decide whether, on balance, a transfer would serve ‘the convenience of parties and witnesses' and otherwise promote ‘the interests of justice.'” Atlantic Marine Const. Co. v. U.S. Dist. Court for W. Dist. of Texas, 134 S.Ct. 568, 581 (2013)(quoting 28 U.S.C. § 1404(a)). When, however, the parties' contract contains a valid forum-selection clause, the “enforcement of valid forum-selection clauses, bargained for by the parties, protects their legitimate expectations and furthers vital interests of the justice system.” Atlantic Marine, 134 S.Ct. at 581 (quoting Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 33 (1988)). Accordingly, a valid forum-selection clause should be given “controlling weight in all but the most exceptional cases.” Atlantic Marine, 134 S.Ct. at 581.

         When a valid forum-selection clause applies, the Court's analysis under § 1404(a) is modified in three ways: “First, the plaintiff's choice of forum merits no weight and the plaintiff bears the burden to establish that transfer to the forum for which the parties bargained is unwarranted”; second, the Court “should not consider arguments about the parties' private interests” because the parties “waive the right to challenge the preselected forum as inconvenient or less convenient”; and third, “the transfer of venue will not carry with it the original choice-of-law rules.” Id.


         As noted, in their alternative Motion to Transfer Venue based on the terms of the Agreements, Defendants contend (1) all of Plaintiff's claims asserted against them are subject to arbitration; (2) in the alternative, the proper forum for resolution of these matters is the federal court in San Diego, California; and (3) Plaintiff has waived any right to a jury trial on its claims.

         In response Plaintiff contends (1) its claims are exempt from arbitration pursuant to the terms of the Agreements; (2) its claims are not subject to the forum-selection clauses of the Employment Agreements and, therefore, are properly filed in this Court; and (3) even if the forum-selection clause is applicable, the proper forum would be a California state court in San Diego, California. The Court notes Plaintiff also concedes the Court should strike Plaintiff's request for a jury trial.

         I. Applicable ...

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